Airbus Eyes New Engines, Stretch for A380
Company attempts to allay concerns over talk of program's demise
Airbus CEO Fabrice Bregier wondered aloud about concern about the prospects for the A380 at his company's Global Investor Forum in London this week. "Where is the problem on the A380?" he asked. (Photo: Airbus)

A day after Airbus Group CFO Harald Wilhelm’s remarks about the prospects for the end of A380 production, executives engaged in some damage control on Thursday at the company’s Global Investor Forum in London, insisting that the future of the superjumbo remains bright while conceding the need for performance improvements.


Airbus sent ripples through the investment community on Wednesday, when Wilhelm told attendees in London that the company couldn’t guarantee a break-even year for the program in 2018 and that a real possibility existed that the A380 could go out of production not much later, while Airbus Group CEO Tom Enders warned of yet another rate drop for the A330 in 2016 following a decrease from 10 airplanes a month to nine next year.


A month ago Airbus said it expected the loss-making A380 program to reach break-even status by the end of 2015, helping to offset continued cost increases associated with A350 production support. In London, Wilhelm reiterated the 2015 projection, and insisted the A380 would break even in 2016 and 2017 as well. His apparent reticence about 2018 caught investors’ attention, however, and shares in Airbus Group plunged more than 10 percent on Wednesday.


A day later, the CEO of Airbus’s commercial aircraft division, Fabrice Bregier, sought to allay the concerns caused by Wilhelm’s remarks, insisting the improvements to the A380 would ensure no premature end to production.


 â€œLonger term...this aircraft will have extra potential,” said Bregier. “Yes, we will one day launch an A380neo. And I will tell you a secret—we will one day launch a stretch of the A380. This is so obvious that there is extra potential...This aircraft will find its place day after day. So don’t be too impatient.”  


The A380 has drawn no airline orders this year. With the cancellation of an order for six airplanes by Japan’s Skymark Airlines and deliveries of 21 through the first three quarters of the year, the backlog now stands at roughly 175, representing some six years of production at its current output of 30 per year. Despite the recent slow sales, Bregier refused to concede any dissatisfaction with the A380’s market position.


“We are almost fully booked for the next three years,” added Bregier. “Where is the problem on the A380? The market is not the size of the A320 market. But we don’t need this size. We are reducing the recurring costs; we are reducing the fixed costs; we can be break-even with 30 aircraft a year and probably fewer numbers and we are continuing to improve on that.”